Hong Kong Aims to Lead in Green Tech and Finance

Hong Kong’s vision of becoming a global hub for green technology and finance can materialize with a strategic focus on supporting startups and harnessing China’s expertise in pivotal technologies, asserts the FinTech Association of Hong Kong.

Sandeep Sethi, Co-Chair of the non-profit organization’s Green Tech and ESG Committee, emphasizes the need for intensified collaboration between the government and the private sector. He advocates for the creation of funding structures to support green startups, attracting and nurturing a talented workforce, and cultivating a risk-taking mindset.

“Various cities are trying to promote themselves as green tech centers,” says Sethi, urging Hong Kong to assert its leadership in this domain by identifying sub-sectors where the city holds distinct advantages.

Highlighting China’s leadership in electric vehicles, renewable energy, and hydrogen, Sethi suggests that initial collaboration targets should revolve around these sectors.

Financial Secretary Paul Chan Mo-po had underscored Hong Kong’s ambition to become an international center for both green tech and finance in his budget speech last February. The government subsequently established a green technology and finance development committee, comprising leaders from finance, technology, academia, and professional services sectors.

The upcoming Hong Kong GreenTech Week, hosted by the government next month, aims to bring together global green tech businesses and investors, according to the Green Development Institute.

On a practical level, Chris Barford, a director of the FinTech Association of Hong Kong, suggests that Hong Kong can enhance its support for green tech startups, particularly in areas such as low-carbon energy products and data analytics for climate risks. Barford emphasizes the need for expanded financial assistance programs to encourage participation from family offices and institutional investors in fundraising.

The Hong Kong government is already taking steps in this direction, providing support through various research and development funding schemes, totaling around HK$400 million for approximately 130 green tech R&D projects as of last June. Additionally, the HK$400 million Green Tech Fund supports projects in net-zero electricity generation, energy savings, green buildings, green transport, and waste reduction.

However, there remains a gap between intention and actual project financing, notes Sethi. He suggests that public-private collaborative funding can be instrumental, particularly for innovative technology projects where proving business case profitability can be challenging.

Talent pool growth is identified as a hurdle, with 80% of senior finance executives in Hong Kong reporting difficulty in recruiting green and sustainable finance professionals, according to a survey by the Hong Kong University of Science and Technology.

Sethi also points out the need to foster a risk-taking mindset, observing that many Asian education systems prioritize stable job preparation over entrepreneurship. Changing this mindset, he notes, could take years or even generations.

Mayon emphasizes Hong Kong’s ambition  to position itself as a global leader in green technology and finance.

While the government has taken steps to establish committees and funding programs, there is a recognition of challenges, including the need for expanded financial assistance programs and addressing the gap between intention and project financing.

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